Accounting and Financial Reporting
CPAs are facing unprecedented changes in financial reporting. Economic, regulatory, and global forces are demanding higher-quality reporting while standards are in continual flux. While the Financial Accounting Standards Board (FASB) is proposing significant changes to U.S. generally accepted accounting principles there is an ever-increasing pressure for differentiation between public and private entity standards. The information and resources here will help you stay informed of changes to accounting standards and provide you guidance to ensure high quality financial reporting.
FASB ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Released
On June 16, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The release of this new standard marks the end for accounting for credit losses using an incurred model. The standard will:
- Apply to most debt instruments, trade receivables, lease receivables, reinsurance receivables, financial guarantee contracts and loan commitments.
- Financial instruments measured at fair value, some equity instruments and available for sale debt securities will still be excluded.
- Entities would recognize as an allowance the estimate of contractual cash flows not expected to be collected.
- Entities would consider all available relevant information in making the estimate, including historical charge-offs and other past events, current conditions, and reasonable and supportable forecasts and their implications for expected credit losses.
- Entities would revert to an unadjusted historical credit loss experience for the period beyond which it can make its reasonable and supportable projections.
More information is available in the AICPA's Financial Instruments area of the Financial Reporting Center.
FASB ASU No. 2016-02, Leases Released
On February 25, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases. The standard will require that lessees record nearly all leases on the balance sheet. Lessors will see some changes too, largely made to align with the revised lessee model and the FASB's new revenue recognition guidance
More information is available in the AICPA's Leases area of the Financial Reporting Center.
FASB ASU No. 2014-09, Revenue from Contracts with Customers Released
The Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. The standard has completely rewritten the revenue recognition guidance contained in the Accounting Standards Codification.
More information is available in the AICPA's Revenue Recognition area of the Financial Reporting Center.
FASB’s Not-for-Profit Financial Reporting Standard ASU 2016-14 Toolkit
Firms, not-for-profit entities (NFPs), and their boards of directors will soon see some changes to NFP financial statements as a result of recent FASB Accounting Standards Update (ASU) 2016-14. Effective for periods beginning after December 15, 2017, this ASU was presented to simplify the net asset classification requirements and improve the information presented in financial statements and notes about an NFP’s liquidity, financial performance and cash flows.
More information is available in the Exploring FASB’s Not-for-Profit Financial Reporting Standard ASU 2016-14 Toolkit.
Financial Reporting Framework for Small- and Medium-Sized Entities and FRF for SMEs™ Toolkits Released
The AICPA has released the Financial Reporting Framework for Small- and Medium-Sized Entities and FRF for SMEs™ Toolkits for CPAs, financial statement users, and small businesses.
The FRF for SMEs™ accounting framework is designed for America's small business community. It delivers financial statements that provide useful, relevant information in a simplified, consistent, cost-effective way.
Thoughts on Professional Judgment
With the increasingly complex nature of global business, the need for reliable, transparent financial information is more pronounced today than ever before. We expect financial statement preparers to apply judgment in the preparation and auditors to apply judgment in the audit of financial statements in a professional manner.
Find out more about professional judgment.
In an effort to keep its members informed, the AICPA has created a Standards Tracker. This tool will keep members up to date regarding the most recent guidance made available by standard setters, filtered in order to give you only what you need to know.
AICPA Financial Reporting Executive Committee
Financial Reporting Executive Committee (FinREC) is an AICPA technical committee for financial reporting. Its mission is to determine the AICPA’s technical policies regarding financial reporting standards and to be the AICPA’s spokesbody on those matters, with the ultimate purpose of serving the public interest by improving financial reporting.